Appeals Court Throws Out Scholarship Suit Against the NCAA

Last week a federal appeals court decided to decline reviving an antitrust suit brought by two former college football players against the NCAA. The two men lost their scholarships after suffering injuries and claimed that they were wrongly denied multiyear scholarships which could have covered the expense of their bachelor’s degrees whether they were actively playing or not. The two argued that the NCAA rules cap the length and number of scholarships allotted to each team and, by doing so, hurt competition in the market for talented college athletes.

Their claim was rejected by the Court of Appeals of the Seventh Circuit which upheld a lower district court’s decision to dismiss the case. The lower court sided with the NCAA and said the group should have broad discretion when enacting rules to prevent college sports from becoming to professional. The decision to implement scholarship caps fell under that purview according to the district court.

Though the Seventh Circuit agreed with the ultimate decision it disagreed with the lower court’s logic. The appeals court said that it would not assume that the scholarship rules were valid but decided instead that the market for bachelor’s degrees did not qualify for antitrust protection. Federal antitrust law only applies to commercial transactions, and the court pointed out that students could not simply purchase a degree. Judge Joel Flaum wrote for the unanimous panel that, “As many unhappy undergraduates can attest, payment of tuition does not ensure the receipt of a degree.”

The court did not flatly reject the claim as ridiculous and said that the injured former players could have argued that the NCAA rules limit competition between schools for athletic labor. However, they failed to make such an argument in their complaint and, as such, the Seventh Circuit could not consider it.

The lawyer for the plaintiffs, Steve Berman, took solace in the ruling saying that it created an opportunity for a new lawsuit that makes a better case. Rather than focusing on the market for college degrees he said he will focus on the student athlete labor market. He said that, “We know what the 7th Circuit wants, and we think we can easily do that.”